HAUPPAUGE, N.Y., July 10, 2014 /PRNewswire/ -- VOXX
International Corporation (NASDAQ: VOXX), today announced financial
results for its Fiscal 2015 first quarter ended May 31, 2014.
Pat Lavelle, VOXX International's
President and CEO stated, "Our first quarter results, while lower
than last year, came in as expected and our guidance for the year
remains unchanged. We had previously communicated that our
first quarter would be impacted by weather and a soft retail
environment, similar to our fiscal 2014 fourth quarter. Our
product margins are however trending upwards and expenses are in
line with our planned increase of 4-5%. For the second
quarter, we expect to see sales similar to what we posted in last
year's second quarter but with higher margins and we have every
reason to believe sell-in at retail will be strong as we load-in
products for the all-important holiday season."
Lavelle continued, "Demand for some of our new Premium Audio
products, such as our new Reference speaker lines under Klipsch and
our Concert series under Jamo has been strong and we continue to
receive positive reception from our retail partners around the
upcoming launch of our action cameras and biometric products.
While both of these new categories will have a positive impact on
our results this year, it will not be major as we will launch them
later in the fiscal year. We expect these categories, as well
as sales from the recently announced Car Connection insurance
discount programs, to have a more meaningful impact on our sales
and profitability next year.
First Quarter Results
Net sales for the Fiscal 2015 first quarter ended May 31, 2014 were $186.9
million compared to $193.0
million reported in the comparable year-ago period, a
decline of 3.1%.
Automotive sales for the Fiscal 2015 first quarter were
$102.4 million, a decline of 1.7% as
compared to $104.2 million reported
in the Fiscal 2014 first quarter, primarily as a result of a
customer requested short-term suspension of an OEM program.
The Company expects that this issue will have little or no
effect on the second quarter. As anticipated, the Company's
Venezuela operation continues to
be negatively affected by the political situation in that country,
and last year's first quarter included sales from two OEM customers
that were not expected to repeat this year. Additionally,
higher sales of the Company's Car Connection Telematics product, as
well as continued improved tuner and antenna sales at VOXX
Hirschmann offset some of the declines.
Premium Audio sales for the Fiscal 2015 first quarter were
$35.2 million, a decline of 12.3% as
compared to $40.2 million reported in
the comparable year-ago period. The Company is gearing up for
the second quarter launch of several new product lines and has
purposely curtailed sales to some key retailers to make way for
these new inventory load ins. Partially offsetting these
declines were higher sales of cinema speaker products as the
Company continues to see increased penetration in this market.
Consumer Accessories sales for the Fiscal 2015 first quarter
were $49.1 million, an increase of
1.7% as compared to $48.3 million
reported in the Fiscal 2014 first quarter. Increased sales in
the Company's Mexican subsidiary combined with a business plan
shift in that market fueled some of the growth. Additionally,
higher sales of wireless and Bluetooth speakers, reception
products, as well as higher sales in the Company's European markets
also contributed to the increase, and were partially offset by the
planned declines in sales of clock radios, digital voice recorders
and MP3 players as the Company continues to exit these
categories.
As a percentage of sales for the Fiscal 2015 first quarter ended
May 31, 2014, Automotive represented
54.8%, Premium Audio represented 18.8% and Consumer Accessories
represented 26.3%. As a percentage of sales for the Fiscal
2014 first quarter ended May 31,
2013, Automotive represented 54.0%, Premium Audio
represented 20.8% and Consumer Accessories represented 25.0%.
The gross margin for the Fiscal 2015 first quarter was 28.4%, an
increase of 20 basis points as compared to 28.2% for the same
period last year. The increase was primarily driven by higher
gross margins in the Automotive segment and partially offset by
declines in gross margins in the Premium Audio and Consumer
Accessories segments. This is due largely to product mix and
the clearing out of older product lines to make way for new product
introductions.
Operating expenses for the Fiscal 2015 first quarter were
$53.5 million, an increase of 4.6% as
compared to operating expenses of $51.1
million reported in the comparable year-ago period. As
previously discussed the Company continues to hire new engineers to
support future programs, and has increased advertising and
marketing expenses for the new launches. Offsetting these
increases were lower sales commissions and stock option expense
compared to the prior year.
The Company reported an operating loss of $0.4 million for the Fiscal 2015 first quarter as
compared to operating income of $3.4
million reported in the Fiscal 2014 first quarter.
Lower sales volumes and higher expenses contributed to the variance
for the year-over-year periods, and were partially offset by higher
gross margins.
The Company reported net income of $0.5
million and net income per diluted share of $0.02 for the Fiscal 2015 first quarter as
compared to net income of $2.1
million and net income per diluted share of $0.09 for the comparable period last year.
Net income for the Fiscal 2015 first quarter was favorably impacted
by improved performance of the Company's equity investment ("ASA")
and a decrease in restructuring charges, offset by lower net
sales. Net income for the Fiscal 2014 first quarter was
favorably impacted by the absence of acquisition and certain other
professional fees due to a decrease in related activities as
compared to previous periods, partially offset by restructuring
charges. Additionally, approximately $2 million in engineering expense reimbursements
which were slated to be recognized for the first quarter will now
be realized in the second quarter and keep us on our internal
plan. As of today, we have received this payment.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") for the Fiscal 2015 first quarter was $6.1 million as compared to EBITDA of
$9.2 million reported in the Fiscal
2014 first quarter.
Mr. Lavelle concluded, "Our team remains focused on cash
generation and delivering sustainable results that will increase
shareholder value. We continue to strengthen the Company by
adding staff to support both existing and new projects, primarily
within our Automotive segment, but also in support of our other
lines of business. Our capital structure should also improve
this year and barring any acquisitions, we intend to continue to
pay down our debt. Finally, we continually look at new growth
categories that can fuel our business and I have every reason to
believe we are positioned well for organic growth next year, with
potential upside to our numbers this year if the global economies
improve."
Non-GAAP Measures
EBITDA is not a financial measure recognized by GAAP. EBITDA
represents net income, computed in accordance with GAAP, before
interest expense, taxes and depreciation and amortization. We
present EBITDA in this release and in our Form 10-Q because we
consider it to be useful and appropriate supplemental measure of
our performance. EBITDA helps us to evaluate our performance
without the effects of certain GAAP calculations that may not have
a direct cash impact on our current operating performance. EBITDA
should not be assessed in isolation from or construed as a
substitute for net income prepared in accordance with GAAP. EBITDA
is not intended to represent, and should not be considered to be a
more meaningful measure than, or an alternative to, measures of
operating performance as determined in accordance with
GAAP.
Conference Call Information
The Company will be hosting its conference call on Friday, July 11, 2014 at 10:00 a.m. ET. Interested parties can
participate by visiting www.voxxintl.com, and clicking on the
webcast in the Investor Relations section or via teleconference
(toll-free number: 877-303-9079; international: 970-315-0461 /
conference ID: 66761159). For those unable to join, a replay
will be available approximately four hours after the call has been
completed and will last for one week (replay number: 855-859-2056;
international replay: 404-537-3406; conference ID: 66761159).
About VOXX International Corporation
VOXX International Corporation (NASDAQ:VOXX) is the new name for
Audiovox Corporation, a company that was formed over 45 years ago
as Audiovox that has grown into a worldwide leader in many
automotive and consumer electronics and accessories categories, as
well as premium high-end audio. Through its wholly-owned
subsidiaries, VOXX International proudly is recognized as the #1
premium loudspeaker company in the world, and has #1 market
positions in automotive video entertainment and remote starts,
digital TV tuners and digital antennas. The Company's brands
also hold #1 market share for TV remote controls and reception
products and leading market positions across a wide-spectrum of
other consumer and automotive segments.
Today, VOXX International Corporation is a global company, with
an extensive distribution network that includes power retailers,
mass merchandisers, 12-volt specialists and most of the world's
leading automotive manufacturers. The Company has an
international footprint in Europe,
Asia, Mexico and South
America, and a growing portfolio, which now comprises over
30 trusted brands. Among the key domestic brands are Klipsch®,
RCA®, Invision®, Jensen®, Audiovox®, Terk®, Acoustic Research®,
Advent®, Code Alarm®, CarLink®, 808®, AR for Her®, and Prestige®.
International brands include Hirschmann Car Communication®,
Klipsch®, Jamo®, Energy®, Mirage®, Mac Audio®, Magnat®, Heco®,
Schwaiger®, Oehlbach® and Incaar™. The Company continues to
drive innovation throughout all of its subsidiaries, and maintains
its commitment to exceeding the needs of the consumers it serves.
For additional information, please visit our Web site at
www.voxxintl.com.
Safe Harbor Statement
Except for historical information contained herein,
statements made in this release that would constitute
forward-looking statements may involve certain risks and
uncertainties. All forward-looking statements made in this release
are based on currently available information and the Company
assumes no responsibility to update any such forward-looking
statements. The following factors, among others, may cause actual
results to differ materially from the results suggested in the
forward-looking statements. The factors include, but are not
limited to risks that may result from changes in the Company's
business operations; our ability to keep pace with technological
advances; significant competition in the automotive, premium audio
and consumer accessories businesses; our relationships with key
suppliers and customers; quality and consumer acceptance of newly
introduced products; market volatility; non-availability of
product; excess inventory; price and product competition; new
product introductions; foreign currency fluctuations and concerns
regarding the European debt crisis; restrictive debt covenants; the
possibility that the review of our prior filings by the SEC may
result in changes to our financial statements; and the possibility
that stockholders or regulatory authorities may initiate
proceedings against VOXX International Corporation and/or our
officers and directors as a result of any restatements. Risk
factors associated with our business, including some of the facts
set forth herein, are detailed in the Company's Form 10-K for the
fiscal year ended February 28,
2014.
Company Contact:
Glenn Wiener, President
GW Communications
Tel: 212-786-6011
Email: gwiener@GWCco.com
VOXX International
Corporation and Subsidiaries
|
Consolidated Balance
Sheets
|
(In
thousands)
|
|
|
|
May 31,
2014
|
|
February 28,
2014
|
Assets
|
|
(unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
10,926
|
|
|
$
|
10,603
|
|
Accounts receivable,
net
|
|
121,971
|
|
|
147,054
|
|
Inventory,
net
|
|
143,173
|
|
|
144,339
|
|
Receivables from
vendors
|
|
3,484
|
|
|
2,443
|
|
Investment
securities, current
|
|
7,654
|
|
|
—
|
|
Prepaid expenses and
other current assets
|
|
16,357
|
|
|
15,897
|
|
Income tax
receivable
|
|
4,276
|
|
|
2,463
|
|
Deferred income
taxes
|
|
2,862
|
|
|
3,058
|
|
Total current
assets
|
|
310,703
|
|
|
325,857
|
|
Investment
securities
|
|
12,413
|
|
|
14,102
|
|
Equity
investments
|
|
21,385
|
|
|
20,628
|
|
Property, plant and
equipment, net
|
|
83,244
|
|
|
83,222
|
|
Goodwill
|
|
117,464
|
|
|
117,938
|
|
Intangible assets,
net
|
|
172,654
|
|
|
174,312
|
|
Deferred income
taxes
|
|
775
|
|
|
760
|
|
Other
assets
|
|
9,808
|
|
|
10,331
|
|
Total
assets
|
|
$
|
728,446
|
|
|
$
|
747,150
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
64,827
|
|
|
$
|
55,373
|
|
Accrued expenses and
other current liabilities
|
|
52,840
|
|
|
59,247
|
|
Income taxes
payable
|
|
3,125
|
|
|
3,634
|
|
Accrued sales
incentives
|
|
14,642
|
|
|
17,401
|
|
Deferred income
taxes
|
|
10
|
|
|
9
|
|
Current portion of
long-term debt
|
|
6,530
|
|
|
5,960
|
|
Total current
liabilities
|
|
141,974
|
|
|
141,624
|
|
Long-term
debt
|
|
84,218
|
|
|
103,222
|
|
Capital lease
obligation
|
|
5,971
|
|
|
6,114
|
|
Deferred
compensation
|
|
5,684
|
|
|
5,807
|
|
Other tax
liabilities
|
|
10,781
|
|
|
11,060
|
|
Deferred tax
liabilities
|
|
34,991
|
|
|
34,963
|
|
Other long-term
liabilities
|
|
14,470
|
|
|
14,776
|
|
Total
liabilities
|
|
298,089
|
|
|
317,566
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Preferred
stock
|
|
—
|
|
|
—
|
|
Common
stock
|
|
277
|
|
|
277
|
|
Paid-in
capital
|
|
291,035
|
|
|
290,960
|
|
Retained
earnings
|
|
159,060
|
|
|
158,571
|
|
Accumulated other
comprehensive loss
|
|
(1,664)
|
|
|
(1,873)
|
|
Treasury
stock
|
|
(18,351)
|
|
|
(18,351)
|
|
Total stockholders'
equity
|
|
430,357
|
|
|
429,584
|
|
Total liabilities and
stockholders' equity
|
|
$
|
728,446
|
|
|
$
|
747,150
|
|
VOXX
International Corporation and Subsidiaries
|
Consolidated
Statements of Operations and Comprehensive Income
|
(In thousands,
except share and per share data)
|
(unaudited)
|
|
|
|
Three Months
Ended May
31,
|
|
|
2014
|
|
2013
|
Net sales
|
|
$
|
186,899
|
|
|
$
|
192,972
|
|
Cost of
sales
|
|
133,846
|
|
|
138,459
|
|
Gross
profit
|
|
53,053
|
|
|
54,513
|
|
Operating
expenses:
|
|
|
|
|
|
|
Selling
|
|
14,596
|
|
|
13,123
|
|
General and
administrative
|
|
29,615
|
|
|
28,938
|
|
Engineering and
technical support
|
|
9,261
|
|
|
8,735
|
|
Restructuring
expense
|
|
—
|
|
|
303
|
|
Total
operating expenses
|
|
53,472
|
|
|
51,099
|
|
Operating (loss)
income
|
|
(419)
|
|
|
3,414
|
|
Other income
(expense):
|
|
|
|
|
|
|
Interest and bank
charges
|
|
(1,608)
|
|
|
(1,980)
|
|
Equity in income of
equity investees
|
|
1,931
|
|
|
1,756
|
|
Other, net
|
|
653
|
|
|
16
|
|
Total
other income (expense), net
|
|
976
|
|
|
(208)
|
|
Income before income
taxes
|
|
557
|
|
|
3,206
|
|
Income tax
expense
|
|
68
|
|
|
1,064
|
|
Net income
|
|
$
|
489
|
|
|
$
|
2,142
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
(441)
|
|
|
(2,320)
|
|
Derivatives
designated for hedging
|
|
640
|
|
|
311
|
|
Pension plan
adjustments
|
|
10
|
|
|
6
|
|
Other comprehensive
income (loss), net of tax
|
|
209
|
|
|
(2,003)
|
|
Comprehensive
income
|
|
$
|
698
|
|
|
$
|
139
|
|
|
|
|
|
|
|
|
Net income per common
share (basic)
|
|
$
|
0.02
|
|
|
$
|
0.09
|
|
Net income per common
share (diluted)
|
|
$
|
0.02
|
|
|
$
|
0.09
|
|
Weighted-average
common shares outstanding (basic)
|
|
24,518,510
|
|
|
23,720,275
|
|
Weighted-average
common shares outstanding (diluted)
|
|
24,544,535
|
|
|
23,946,638
|
|
|
|
|
|
|
|
VOXX International
Corporation and Subsidiaries
|
Reconciliation of
GAAP Net Income to EBITDA
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
May
31
|
May
31
|
|
|
|
|
2014
|
2013
|
|
|
|
|
|
|
Net Income
|
|
|
489
|
2,142
|
Adjustments:
|
|
|
|
|
|
Interest expense and
bank charges
|
|
1,608
|
1,980
|
|
Depreciation and
amortization
|
|
3,933
|
4,005
|
|
Income tax
expense
|
|
|
68
|
1,064
|
EBITDA
|
|
|
6,098
|
9,191
|
SOURCE VOXX International Corporation (VOXX)